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Panel Says Smart Grid Development Critical to Energy Future

Three energy experts on a panel at Governing's Outlook in the States and Localities conference said Tuesday that building a "smart grid" is key to ensuring a better utility system and brighter future for the U.S.

As policymakers continue to try to support the slowly-recovering U.S. economy, three energy experts on a panel at Governing's Outlook in the States and Localities conference said Tuesday that building a "smart grid" is key to ensuring a better utility system and brighter future for the United States.

A smart grid aims to make the electrical grid more reliable, efficient and cheaper by incorporating real-time data of energy suppliers and their users into how electricity is produced and distributed.

While many other industries have used new technologies to greatly improve service to their customers in recent years, "the electricity industry doesn't even have good monitoring or sensing equipment," said Dan Delurey, president of the Demand Response and Smart Grid Coalition, a trade group.

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"A good example of that is when there is a storm and power is knocked out, your utility doesn't know which house is out and which is not," he added.

Ward Lenz, director of the Energy Office in North Carolina's Department of Commerce, said states are interested in promoting a smart grid because of the economic development opportunities offered; he pointed to his state where he said 3,000 people are employed in building a smart grid.

"It's all about jobs, jobs, jobs," he said.

Another important opportunity mentioned by Delurey is harnessing the power potential generated by the 80 percent of wind that blows at night.

"If you can capture that wind energy at night and use it in the system during the day, then you've taken a big step forward in optimizing how the electricity system works," he said.

However panelists said there are a number of challenges holding back the development of a smarter grid, including the amount of money spent on infrastructure investment, the design of electricity rates, and concerns about the privacy and the use of data collected by smart meters.

One panelist, lawyer Derek Dyson of Duncan, Weinberg, Genser & Pembroke, warned that states may be regulating their utilities too heavily in a way that can lead to higher bills for customers.

"We need to keep in mind that in respect to some of the requirements that the states are placing on the utilities doesn't necessarily always make sense if it's not the same type of requirement we would expect in any other type of industry," he said.

Key security issues still need to be addressed as information technology is integrated into the nation's electricity infrastructure to create a "smart grid," according to a U.S. Government Accountability Office report. If the IT systems are not installed correctly, the report says, the grid will be more vulnerable to cyber-attacks and disrupted service.
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